The Feds Want to Know The Reinsurance Market

I came across a recent article about the newly formed Federal Insurance Office, (FIO), looking into the Reinsurance market. What does "looking into" mean?  Well from what I read the Feds want to determine if they need to regulate the reinsurance marketplace or be a major player in this field. The reinsurance market is a back stop for general insurance companies. When catastrophes happen, general insurance companies do not absorb all the losses themselves. They buy policies from the reinsurance market. This market has protected the country and communities from economic collapse after disasters. As an example following Katrina, 99% of all insurance claims were settled and paid with money from the reinsurance market. It does concern me that the FIO's inquiry may start discussions of more regulation. The mechanisim of these insurers, insuring insurance companies, has worked for over 100 years. My words for the FIO, "if it is not broke don't fix it". Until next time be careful out there and know your risks. K

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